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Medical collections: 8 Tips for reducing collection agency referrals


Here are eight tips to help you keep your patients’ accounts out of collection.

Patients don’t like having their accounts sent to collection agencies for non-payment of medical bills, and few practices like having to send them there. Unfortunately, most of the effort required to avoid sending an account to collection falls on the practice, not the patient. Here are eight tips to help you keep your patients’ accounts out of  collection:

1.  Have a written financial and payment policy form that patients sign. Use examples found in books and online. Don’t try to invent one yourself, because there are laws that apply.

2.  Always make a copy of the patient’s insurance benefit card at the time of visit. Verify that the name on the card matches the patient’s driver’s license information. Check to make certain the insurance card is valid and active. This also helps to avoid a growing trend - healthcare identity theft. In one case I encountered, an insurance company refused to pay for an obstetrical delivery because it appeared to be the patient’s third full-term delivery within the past 12 months. It turned out that two sisters were sharing the same insurance card at two different offices.

3.  Know the deductible and copay rules of your most-common insurance plans, and collect payment-due at time of service (PATOS). If the patient “forgot their wallet” or offers another excuse, offer to reschedule the appointment, unless there is an urgent clinical need for the patient to be seen immediately. Many times the patient will miraculously find the money rather than reschedule.

4.  Collect any prior payments-due at the time of service. Multiple non-payments will make it more likely that you’ll have to send the account to a collection agency.

5.  If the patient does not pay at the time of service and you still keep the appointment, give the patient a stamped, self-addressed envelope, and write the amount due on the inside of the flap. When you hand it to the patient say, “Send the payment as soon as you get home, and we’ll expect to receive it by [date]. I’ll make a note of that in your file.”

6.  Follow up on past due accounts with a phone call within 1 week of the due date. Get a promise to pay, and tell the patient you will make a note of that promise and date in the file. Follow that up with a call or note weekly for up to 90 days. The longer it’s overdue, the less likely you will be paid.

7.  Bill the patient’s insurance promptly. It is common for patients to use up their medical benefits when expecting termination of employment. If you bill after the patient has lost coverage, the insurance company won’t pay, and the patient has probably lost his or her ability to pay.

8.  If a patient truly has a financial hardship and you provide a discount or waive payment, have the patient fill out a hardship form and keep it in his or her file. Samples of these types of form are available online. Many patients asking for an up-front discount decide they would rather pay  than fill out such a form. It’s important for all physicians to do some charity work from time to time, but that doesn’t mean you have to  allow patients to take advantage of the practice.  


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